NY moves to restrict welfare spending on alcohol

ALBANY - New York would prohibit welfare recipients from spending their tax-funded benefits on cigarettes, alcohol, gambling, and strip clubs under a bill passed overwhelmingly by the state Senate on Tuesday.

Ten other states have already ruled social services can't be spent on items from beer to guns.

"I understand that people need food stamps," said Republican Sen. Thomas Libous, a Broome County Republican. "What I don't understand is why they need to go to strip clubs, buy lottery tickets, go to a 'racino' or buy alcohol."

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Libous said New York must restrict the spending by recipients whose benefits are linked to debit cards to conform to federal law. President Barack Obama signed a law in February that will require states to restrict how the cash portion of social services is spent, or lose 5 percent of Temporary Assistance to Needy Families funding. New York risks losing $125 million next year.

Others questioned the need for the restrictions, saying they were a slap at the poor.

"It's a prejudice, I think, about poor people that we are seeing represented more than any statistical or study of behavior," said Sen. Bill Perkins, a Harlem Democat and one of the few senators to vote against the measure. "If they have evidence that there's a rash of that, I'd like to see it."

Libous's "Public Assistance Integrity Act" would specifically prohibit the purchase of tobacco products, alcohol and lottery tickets, which would be a regulation that could be hard to enforce. Easier to enforce because of its paper trail would be his proposed ban on the withdrawal of cash from the Electronic Benefits Transfer card at automatic teller machines in liquor stores, casinos, and adult entertainment bars and clubs.

Perkins said the bill would penalize a poor mother who simply withdrew money to buy milk if she used an ATM in a banned establishment to do so.

Many states, including New York, issue welfare recipients an Electronic Benefits Transfer card, or EBT card, with cash benefits. The systems have simplified the distribution of financial assistance, but they also provide a way of tracking where the benefits are withdrawn.

New York's Republican senators who led the bipartisan 56-3 vote Tuesday said New Yorkers are amazed the law allows such spending now. The law prohibits the use of food stamps to buy alcohol or tobacco products, but it's allowed under the "cash allowance" contained in the EBT cards.

"'They can do that? Are you kidding me?'" said Sen. John DeFrancisco, a Syracuse Republican, in recounting constituents' reaction. "That outrage is well placed," he said.

"Right now, under the law, you can use the cash assigned for gambling, alcohol and lottery tickets," Libous said. "We get quite a few complaints on an annual basis."

Some state officials are concerned the federal measure, and its 5-percent penalty for failure to enact restrictions, infringes on states' rights to distribute federal welfare benefits under their own rules.

Libous says that if New York doesn't act to restrict spending using welfare cash, the state could lose $125 million in federal funding tied to the federal initiative.

Now the bill goes to the Democrat-led Assembly, which hasn't introduced it.